Commercial Litigation and Arbitration

FRAP 38 Sanctions: An Appeal May Not Be “Wholly Without Merit” — And Therefore May Not Be Sanctionable — Even If Several of Appellant’s Arguments Are Frivolous; Soundness of Central Arguments May Dominate

Baskin v. EC Paia LLC, 2024 U.S. App. LEXIS 1108 (9th Cir. Jan. 19, 2024):


Defendant-Appellant's motion for attorneys' fees, including the request to assess fees as damages under Rule 38 of the Federal Rules of Appellate Procedure for filing a frivolous appeal and the request to assess fees for defending the district court's award of fees under HRS § 607-14 (Docket No. 50) is granted in part.

On review of the record, we conclude that the Plaintiffs-Appellees' attorneys did not "act[] recklessly or in bad faith." Defendant-Appellant's motion for attorneys' fees is therefore denied as to the request to award fees pursuant to 28 U.S.C. § 1927. Barnd v. City of Tacoma, 664 F.2d 1339, 1343 (9th Cir. 1982).

"We have discretion to award damages, attorney's fees, and single or double costs as a sanction for bringing a frivolous appeal." Blixseth v. Yellowstone Mountain Club, LLC, 796 F.3d 1004, 1007 (9th Cir. 2015); Fed. R. App. P. 38. "An appeal is frivolous when the result is obvious or the appellant's arguments are wholly without merit." Id.

Plaintiffs-Appellees had adequate opportunity to respond to Defendant-Appellant's assertions of frivolousness but did not.

We conclude that the appeal was not "wholly without merit," although several of the arguments made were frivolous. The Court holds Plaintiffs-Appellees' jurisdictional, fair opportunity to be heard, and bill of costs arguments on appeal frivolous. We hold Plaintiffs-Appellees' breach of land agreement and attorneys' fees arguments not frivolous. Given the centrality of the breach of land agreement and fees arguments, we hold the appeal as a whole not frivolous. Harris v. Polskie Linie Lotnicze, 820 F.2d 1000, 1005 (9th Cir. 1987) ("Fed.R.App.P. 38 authorizes sanctions for a frivolous 'appeal,' not for a frivolous argument."). For this reason, EC Paia is not entitled to damages pursuant to Rule 38 of the Federal Rules of Appellate Procedure.

EC Paia is entitled to attorneys' fees pursuant to HRS § 607-14 for defending the district court's fee award. The determination of the appropriate amount of fees is referred to Appellate Commissioner Lisa B. Fitzgerald, who has authority to conduct whatever proceedings she deems appropriate and to enter an order awarding fees subject to reconsideration by the panel. See 9th Cir. R. 39-1.9.

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